New Commission committed to neo-liberal economic agenda
Bulletin 5- 20 October 2004

Main points:

1. European Social Forum makes case against the Constitution
Gathering of activists rejects "neo-liberal" text and calls for rethink

2. EU threatens to block aid to Eastern Europe
Commission tells new EU states to stay within Stability Pact strait-jacket

3. Tax case could cost Britain £20 billion
European Court of Justice backs business over Treasury

4. EU Commission row as Parliament rejects anti-gay candidate
Stand off as conservative MEPs and Commission back Buttiglione

5. Gisela Stewart calls Constitution "a lost opportunity"
Labour MP criticises the proposed Constitution for centralising power

6. Early membership of euro out for new member states
EU will stay mainly non-euro for next few years at least

1. European Social Forum makes case against the Constitution

The EU Constitution and the need for progressive reform of the EU were major themes of the European Social Forum, held in London’s Alexandra Palace last weekend. The Forum, which saw over 20,000 people gather from across Europe, included a number of debates and seminars on the Constitution, the "Bolkstein Directive" on Services, and other EU related issues.

In the main plenary session on the Constitution, Bernard Cassen of Attac France and others rejected the idea that a constitution should contain detailed policy, especially right-wing economic policy. While Richard Laming of the Federal Union defended the Constitution as imperfect but "a step forward", MEP Francis Wurtz said of the Charter of Fundamental Rights, "You might as well paper your bedroom wall with it, for that's all its good for."

The Forum agreed a statement on the European Constitution that said, "The draft does not meet our aspirations. This constitution treaty consecrates neo-liberalism as the official doctrine of the EU; it makes competition the basis for European community law, and indeed for all human activity; it completely ignores the objectives of ecologically sustainable society."

It went on to say, "This constitutional treaty does not grant equal rights, the free movement of people and citizenship for everyone in the country they live in, whatever their nationality; it gives NATO a role in European foreign policy and defence, and pushes for the militarisation of the EU. Finally it puts the market first by marginalising the social sphere, and hence accelerating the destruction of public services."

The European Social Forum is right to point to the problems with the proposed EU Constitution. The Constitution is a step back for the left – that is why the Forum, backed by centre-left groups and NGOs from across Europe, and sponsored by Trade Unions – chose to criticise it so strongly. The statement highlights a growing desire across the EU left to campaign for the Constitution’s rejection.

2. EU threatens to block aid to Eastern Europe

European Monetary Commissioner, Joaquín Almunia last week asserted his willingness to use coercive mechanisms to implement the Euro’s Stability Pact. The Commissioner is planning to use the threat of withdrawing structural development funds from member states who break the Pact. These countries tend to be the new member states rather than the larger states who have transgressed the Pact, such as France and Germany, as the latter are not in receipt of funds.

The reassertion of the mechanism comes as the Commission debate how to ensure that countries stick to the Euro’s restrictive budgetary rules. Mr Almunia said, “If a member state receiving cohesion funds isn't achieving its commitments in the budgetary surveillance field, the Commission can suspend funding.”

3. Tax case could cost Britain £20 billion

A new report by PriceWaterhouseCoopers shows that the UK is in significant breach of EU tax legislation. The report found that every member state of the European Union is in breach in one or more areas, but that the UK breaches more areas than any other member state. PwC Senior tax partner Peter Cussons said, “Under EU law, one member state cannot discriminate against individuals or companies from another member state. However, our survey findings illustrate that all EU member states have at least one type of tax legislation in place which does discriminate.”

The report follows a ruling by the European Court of Justice last month, that the Finnish Government could not give tax credits on dividends from domestic companies that it does not give to foreign companies. The ECJ has received challenges from businesses who dispute their tax bills and it has been estimated that the total cost of the ruling to the UK Government could be as high as £20bn.

4. EU Commission row as Parliament rejects anti-gay candidate

As the Commission President designate, José Manuel Barroso, tries to strike a deal to ensure the nomination of controversial Italian nominee Rocco Buttiglione, the European Parliamentary Greens have announced that they will oppose the whole Commission. The group, the fourth largest in the Parliament, said that they cannot support six of the twenty five Commissioners as three of them are incompetent (Stavros Dimas, László Kovacs and Ingrida Udre), two have a conflict of interest (Mariann Fischer Boel and Neelie Kroes) and for political reasons they will oppose Rocco Buttiglione.

Mr Buttiglione has earned a reputation as a controversial figure after he said that he thought homosexuality was “a sin” and because he has described immigration as a “time bomb”. He compounded his problems in the midst of the crisis, when called single mothers, “not very good mothers”. However, a senior Vatican official Cardinal Renato Martino, has said Buttiglione is facing “a lay inquisition”.

It seems that the position of Commission President José Manuel Barroso is shifting towards a compromise that will ensure that Mr Buttiglione is confirmed as a Commissioner. Although many MEPs have said that they will vote against the entire Commission (the Parliament can only reject the whole team) it is thought a majority can be brought together to back the nomination if Buttiglione has some areas of his Justice portfolio removed.

5. Gisela Stewart calls Constitution “a lost opportunity”

Gisela Stuart, the Labour MP who sat on the Presidium of the Convention that Drafted the EU’s Constitution has described the document as a, “lost opportunity.” Ms Stuart, speaking at a conference in Birmingham, criticised the draft for making the EU too inflexible. She said, “One underlying problem is that there is no mechanism for specifically abandoning legislation if the case for it has not been proved. There is no delete button.”

The Birmingham MP pointed out that Europeans need to think not just about how much European integration they want, but also what sort of integration. She said, “I would like to see people look carefully at the kind of Europe they want and put a constitutional framework in place that will achieve it.”

6. Early membership of euro ruled out for new member states

A report out this week from the European Commission has suggested that none of the EU’s new Member states are ready to join the euro. All countries not in the single currency have to submit “convergence reports” every two years to measure progress towards joining the euro. However, Britain and Denmark do not submit reports because they have Treaty opt-outs from joining.

Sweden and Lithuania are judged to be closest to euro membership, passing three of the five criteria for joining, while Poland and Hungary fail on all of the tests. The Commission's criteria assess exchange rates, price stability, interest rates, deficits and the status of central banks in the country. The main problem for the new Member states is higher than allowed budget deficits.



...making the progressive case for EU reform